Shares in Green Property surged to an all-time high of €9.70 after it recommended a €1.05 billion bid, led by managing director Mr Stephen Vernon, to take the firm private.

The €9.80 per share offer is being made by Rodinheights, a bid vehicle that also includes Merrill Lynch and Bank of Scotland-owned ICC Holdings.

Shares jumped by nearly 4 per cent to €9.70 before slipping back slightly to close at €9.65 as the market responded positively to the offer, recommended by the independent directors. But dealers are watching to see if a counter-offer emerges. Last night, rival bidder Deutsche Bank said it was still looking at Green, leaving the door open to a possible counter-bid. "The announcement of the current offer does not change our view and we are continuing to look at the company and reviewing our options on how to proceed," a Deutsche Bank spokeswoman said.

Green has been at the centre of takeover speculation since May, with privately owned Treasury Holdings and a group headed by Deutsche Bank Real Estate Private Equity among those vying for control of the property group. Treasury Holdings could not be reached for comment yesterday.

The recommended offer represents a 4 per cent discount to Green's adjusted net asset value at the end of last year.

It also represents a 12.5 per cent premium over the closing share price on May 13th, the day before the firm said it was in talks. "After careful consideration, we are pleased to recommend the offer, which we believe is attractive for Green shareholders as it provides them with an immediate and certain opportunity to realise their investment at a fair price," said chairman Mr Ray MacSharry .

Analysts also said the price was fair and ahead of initial indications that had implied a price of around €9.20. Others said that, given recent volatility in the stock market and that shareholders were unlikely to realise the firm's full value if it remained public, it was likely to be accepted.

This is Mr Vernon's second attempt to take the firm private after a management buyout in which he was involved failed 18 months ago. Although the shares hit a new high on the news yesterday, the deal got the thumbs-down from credit rating agency Standard & Poor's on fears that it would favour the firm's shareholders over its bondholders.

S&P put Green on review for a possible downgrade to junk status from its BBB- rating.